Normandy Park Real Estate LLC Attorney
Forming a company is a difficult process that takes time, effort and insight from all sides involved. However, if you’ve begun this process on your own and you wish to get the help of an experienced attorney, look no further than DAL Law Firm. I am attorney Darcel Lobo, and I have helped many clients start their real estate business with confidence. One of the most effective ways to do that is by utilizing a corporate structure known as an LLC. And if you are in real estate, this form of corporate structure may be a key piece of your strategy.
What Is An LLC?
An LLC, or Limited Liability Company, is a type of business structure that combines the limited liability protection of a corporation with the tax benefits and operational flexibility of a partnership or sole proprietorship. Many of my clients elect to form an LLC to hold investment real estate, such as rental properties, to protect their personal assets from any liabilities stemming from the LLC’s assets.
Here are some key features and benefits of an LLC:
- Limited liability protection: Owners (referred to as members) are typically not personally responsible for the company’s debts and liabilities. This means that personal assets are generally protected if the business incurs debt or is sued.
- Pass-through taxation: Profits and losses can be passed through to members’ personal income without facing corporate taxes. This avoids the double taxation that can occur with traditional corporations, where the business pays corporate taxes and shareholders also pay taxes on dividends.
- Flexibility in management: LLCs can be managed by members or by appointed managers. This allows for flexible management structures compared to corporations, which require a board of directors.
- Operational flexibility: LLCs have fewer formalities and regulatory requirements, making them easier to maintain.
- Profit distribution flexibility: Members of an LLC can decide how to distribute profits among themselves, which doesn’t necessarily have to be in proportion to their ownership percentages.
- Varied ownership: LLCs can have an unlimited number of members, and those members can include individuals, corporations, other LLCs and even foreign entities.
- Credibility and professionalism: Forming an LLC can enhance the credibility and professionalism of your business, as it signifies a legitimate and established entity.
💡 Free resource: Forming your Washington LLC is only the first step toward protecting your investment properties. Download my free guide for an essential post-formation checklist covering business banking, insurance, property titling and annual state renewals. Plus, learn how to avoid common scam letters and explore my firm’s simple flat-fee formation packages. Download the free LLC guide by clicking here.
How Can DAL Law Firm Help You In Forming Your LLC?
In hiring me to create your LLC, I will handle everything in the formation process for you, including:
- Confirming your desired name is available with the state of Washington
- Preparing your Operating Agreement
- Filing your Articles of incorporation with the state of Washington
- Obtaining your Certificate of Formation with the state of Washington
- Obtaining the EIN for the LLC
- Transferring your real estate into your newly formed LLC
- Serving as your Registered Agent
I have been in the business of helping businesses for years and will help you make the right decisions for your real estate company and your future.
Answers To Common Questions About LLCs
A real estate LLC is a common choice of corporate structure for developers and anyone in the commercial property space, but that doesn’t mean the intricacies of it are easy to grasp. If you have questions about this step before you get started, I can help you find the right answers to all your questions, such as:
What is the difference between a member-managed and a manager-managed Real Estate LLC under state law?
The only difference between member-managed and manager-managed LLCs, real estate or not, is that a member-managed LLC is run by the people listed as managers and a manager-managed LLC is run by a designated separate individual. This individual may or may not be a member of the LLC ownership group. The creation of these disparate types of LLC forms are something I can work on with you as we create your business together.
Can a single-member LLC protect my personal assets from a tenant lawsuit?
Yes, with some exceptions. An LLC’s main goal is to limit the personal liability you can face from lawsuits. However, if there is cause to “pierce the corporate veil,” such as evidence of using company assets as personal assets or certain types of fraud, the LLC may not protect you. Still, operating correctly and utilized within the rules, your personal assets will have considerable protection.
What are the mandatory ongoing filing requirements to maintain my real estate LLC’s liability shield after transferring property?
Every LLC must file an annual report to be in good standing with the state. Additionally, you may have to follow rules set by the U.S. Treasury Department under the Beneficial Ownership Information requirement. The specifics of meeting the annual requirements, and post-transfer requirements are often complex, and it is something I can help you prepare for as you move forward.
Get My Assistance Today
If you think an LLC is the right move for your real estate goals, then I can help you. Reach out to me by phone at 206-408-1688 or you can email my office using this contact form.